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Lord McIntosh of Haringey: What is the difference?

Lord McCarthy : I could say, " I may have heard you, or I may not have heard you".

Lord McIntosh of Haringey: It is intended that they should be made only in these circumstances. How is that different from saying that it is intended that they will be made?

Lord McCarthy: Well—

Lord McIntosh of Haringey: It is intended that they could be made, so that there is no possibility that they

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should be made, except in these circumstances. That is what it means. I am talking about the English language now.

Lord McCarthy: The Minister is saying that it would make no difference—I cannot move an amendment on this, so he is quite safe—if it said that the new awards will be made. If I say that "could", in this case, means "will", I will be correct.

Lord McIntosh of Haringey: If it says that the new awards could be made only in certain circumstances, it means that they could not be made other than in those circumstances. That is the same as will, in effect. There is no difference in the English language and there is not much to be gained from this argument.

My answer to the noble Lord, Lord McCarthy, is that it is not standard procedure. It is the same procedure as with costs and expenses. Since we have been quoted again and again, that there have only been 247 costs cases a year out of 130,000 applications, it follows that this is a very rare procedure. It also follows that there is nothing in the argument which the noble Lord, Lord Wedderburn, used, that this is an attempt to discourage applications to the tribunal. It would be quite a pathetic attempt if it were but it certainly is not.

I go further: NACAB quite reasonably talked about the problems of the applicant making out his case on the kitchen table. That is exactly the kind of compensation for preparation time that we are talking about. The applicant has no lawyer; the applicant has nobody to advise him. If the respondent behaves unreasonably, the applicant has no costs which can be awarded against the respondent. The applicant has only his own efforts. Compensation for preparation time precisely helps that. There is a maximum amount that may be made. That applies to costs and expenses and also to compensation for preparation time.

Costs are not intended to act as a deterrent to genuine applications, neither is compensation for preparation time. They are intended both to deter and to protect the other party from vexatious behaviour and cases which have no reasonable prospect of success. We want the costs regime and the compensation regime to operate more fairly, not less fairly.

I can say to the Committee, therefore, that the Government are prepared to think again on this issue and intend to bring forward an amendment at the Report stage. The amendment will have the effect that a party may not receive both case preparation time and a costs award for the same time period. The logic of extending the costs regime to include preparation time is that there should be recompense for people who are not legally represented. Logically, I accept that the extension should not apply to those who engage legal representation. I give that answer specifically to the point that the noble Baroness, Lady Turner, was making on behalf of NACAB.

There are of course details to be worked out, which is what will happen between now and the Report stage. We will let Members of the Committee have sight of

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the proposed amendment as far in advance of the Report stage as we can. On that basis, I hope that the amendment will be withdrawn.

Lord Wedderburn of Charlton: Will the Minister say a word about the points that I raised about a body corporate? No doubt the Government gave great care to drafting this clause—indeed, this new section—of the Employment Tribunals Act; that it is to be time spent that is recompensed by the other party "in preparing his case". How does that apply to a body corporate? Do the Government intend that every person working for the body corporate on the case should be chargeable at so much per hour? The Minister referred in the other place to working out how much per hour. Perhaps the Government have some idea of how much they have in mind? If so, perhaps he could tell us now? How does that apply to a body corporate?

Lord McIntosh of Haringey: The answer is that we do not have an idea yet, no. It will be the tribunals which will calculate the preparation time; it will not be the DTI or the Government. It will be the tribunals themselves.

Lord Wedderburn of Charlton: With guidance.

Lord McIntosh of Haringey: Let me finish the sentence. One possibility is to link assessment to the time and remuneration of the staff of the respondent. Certainly, that is a possibility. As far as we are concerned, a party to the proceedings can be an individual, it can be a body corporate and it can be a partnership, as the amendment points out. It makes no difference as far as the Bill is concerned; there is no reference in the Bill to a body corporate. They are parties to the proceedings. They could be sole traders; they could be partnerships; they could be bodies corporate of various kinds and the rules will apply impartially to whatever corporate status they have. The fundamental answer is that these are difficult regulations to frame and we will have to consult on them before we finish framing them and before they are presented to Parliament.

Lord Wedderburn of Charlton: I am sorry to press my noble friend on this. I am aware that a party may be a sole trader, which is irrelevant to our amendment. I am aware that all sorts of bodies may be involved, but I am concerned, first of all, with the body corporate. Have the Government received legal advice on what is meant in the section they are going to add to the 1996 Act about the time spent preparing the case by a body corporate who is a party to the proceedings? Whose time is included? They must have some idea of this or else they would not have tabled the new section.

Lord McIntosh of Haringey: I have already said that one option is that we will be linking the assessment of compensation for preparation time to the time and remuneration of the staff of the respondent if the respondent is a body corporate. That is one option but there is a whole series of other options for different corporate status.

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4.15 p.m.

Lord Wedderburn of Charlton: It could be that my noble friend has not decided this yet. It is a central issue to the clause but the Government have not yet decided whose time is going to be chargeable as a body corporate's time spent in preparing the case. Could it be all the staff who ever come across it?

Lord McIntosh of Haringey: It would have to be a reasonable assessment of actual tasks. It would have to be within the cost and expenses envelope which already exists; it could not be additional to that. It would have to be assessed by the tribunal. The principal thing is that the advantage of having a compensation for preparation time is that that is available to the applicant, even if the applicant is working for himself. As regards the detail in which the regulations will go about which staff of a body corporate are eligible to be claimed for compensation, that surely is a detail that can be covered in consultation.

Lord Wedderburn of Charlton: With great respect to my noble friend, I want to pursue this. I am sorry to press him on this. He says it is a question of what is reasonable. That is a question of fact. The questions that I am asking are questions of law. If the tribunal awards costs to a body corporate, that is not to do with applicants; I am not sure that the applicant is ever a body corporate in an employment tribunal. If the Minister knows of such cases he will tell me. I am talking about bodies corporate. They are therefore 99.9 per cent—if not 100 per cent—likely to be respondents.

Where there is a body corporate, is it as a matter of law wrong for the tribunal to award preparation time spent by the secretary in the company? It is a question of law. I want to know what the Government's law is. Would it be upset on appeal if it awarded preparation time for someone in a subsidiary company who had worked on it? Does it apply to that party, including all the employees of that party? Does it include the corporate group? We should consider a number of cases in the tribunal. The reality today involves not the company but the corporate group. Does it extend to a party who is a member of a corporate group where the matter has expanded into the issues that relate to corporate groups? The Government must have some view on these questions of law, or have they not bothered?

Lord McIntosh of Haringey: I am advised that there is no issue of law here. I am advised that on the question of the way in which the regulations are framed, the regulations must be framed so as to be even-handed. Of course they must be framed in such a way that the tribunals can interpret them and apply them in an even-handed way between applicants and respondents. Before the regulations have been framed it is certainly not appropriate for me to say that the regulations will include or exclude secretaries or directors or whoever it may be within bodies

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corporate. That is a matter to be determined in the regulations and to be consulted on when draft regulations are amended.

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